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Wednesday, August 28, 2013

Board of Non-Profit Agency Resigns
After Founder Accused of Misusing Money

Funds Allegedly Spent on Strip Clubs, Gambling

HARRISBURG- Attorney General Kathleen G. Kane announced today the resignation of the Board of Directors of Susquehanna House, Inc., a Jersey Shore nonprofit agency that provides services to foster children. Donald M. Hahn, Esquire, has been appointed to serve as a Receiver in place of the board.

The Office of Attorney General sued to remove the board in the wake of the arrest of James McCloy, the founder and principal officer of Susquehanna House. McCloy is accused of misspending hundreds of thousands of dollars on strip clubs, gambling, a New Jersey beach house and mortgage payments on his personal home, among other things.

Kane said the board of directors was not fulfilling its obligation to oversee the nonprofit. Even after McCloy was arrested and charged, the board did not remove him from his job.

Kane said the order from Lycoming County Judge Marc F. Lovecchio approving the board's replacement is a victory for foster children and for the public. The receiver's appointment enables Susquehanna House to attempt to rekindle its charitable programs for at-risk children while the office's litigation continues against McCloy.

Kane adds that people who serve on a charitable board of directors must carry out their fiduciary duties carefully and thoroughly.

The criminal case against McCloy is being handled by Lycoming County District Attorney Eric R. Linhardt, with assistance from the Pennsylvania Office of Attorney General.

The civil case is being handled by Senior Deputy Attorney General Michael T. Foerster of the Attorney General's Charitable Trusts & Organizations Section.

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